Sources tell HuffPost the decision is 'unprecedented'.

Labour’s ruling National Executive Committee (NEC) has voted to ask Haringey Council to halt its controversial public-private housing plan, a party source has told HuffPost.

The unprecedented move follows a bitter battle in the London borough after local activists deselected Labour councillors who backed the so-called Haringey Development Vehicle (HDV).

The project, which is opposed by trade unions and many local party members, intended to transfer large tracts of public land and commercial property to a 50-50 partnership between the Labour-run council and firm Lendlease.

The first full meeting of the newly expanded NEC voted on Tuesday on a motion tabled by Unite member Jim Kennedy to urge the council to pause its plans, a source said.

The move came in response to a plea from 21 Haringey councillors for the NEC to intervene to unpick the legal agreements signed to date on the projecct.

Following a discussion, the motion was amended to ask the council to pause its proposals “if mediation processes do not bring about a resolution”, the source said.

On Jeremy Corbyn’s suggestion, Shadow Communities Secretary Andrew Gwynne will now lead the mediation meetings with Haringey leader Claire Kober.

Kober has defended the public-private project as an effective way to get much-needed housing investment in her area at at time of Tory cuts.

After the amendment, the motion was then passed unanimously by the 39-strong ruling body.

The NEC had been asked to step in in accordance with Chapter 13, Clause XI (5) of the party rule book, which aims to “ensure effective political management and leadership”.

The decision to effectively order a local Labour council to change policy is ‘unprecedented’, one insider said.

But the move was seen as part of the ‘Carillion backlash’ against private sector outsourcing following the collapse of the building firm last week.

The council is currently waiting to hear the results of a judicial review of its plans.

Kober said on Tuesday night: “Our plans are well-thought through, developed over the last two years in response to extensive community engagement and offer the only viable option for building new homes. Sitting on our hands achieves nothing.”

The NEC motion was so controversial that the party’s compliance unit at the meeting were frantically looking through the rules to check if the NEC could indeed act.

In a last ditch-effort to avoid triggering all-out war between its centrist councillors and the party leadership, some members of the NEC recommended mediation to hammer out a possible compromise.

Rather than ‘ordering’ Haringey to halt its plan, the borough is now urged to take part in talks with Gwynne.

“HDV is deeply unpopular in Haringey,” a senior party source said. “Following a request from local councillors for the NEC to intervene, the NEC has agreed to advise Haringey Council to pause the plans if mediation processes do not bring about a resolution.”

Centrist councillors in the borough have blamed grassroots group Momentum for moves against them, although others suggest that the row over the housing plan is not an issue of left or right.

Local MPs David Lammy and Catherine West have also expressed concern over the proposed development plan.

A Momentum source said: “It’s great to see the NEC vote unanimously against this hugely unpopular, damaging policy which, if forced through, could see many residents kicked out of their homes.”

The group’s remarks came as founder Jon Lansman told the Independent that Momentum “nationally” would not target MPs for deselection. “We are not going to campaign to deselect anyone, at all, anywhere.

“No Labour MP that works hard and campaigns and listens to their members has anything to fear from the selection process.”

The Labour leader said that under his plans, councils “will have to win a ballot of existing tenants and leaseholders before any redevelopment scheme can take place.

“Real regeneration, yes, but for the many not the few.”

HaringeyAnti-Haringey HDV protest

Within weeks of his speech, activists mobilised against the Haringey plans.

The NEC is understood to have been influenced by a letter from 22 local Labour councillors who urged that the party’s ruling body should intervene amid fears that the policy would be difficult to stop legally.

“Following the Carillion crisis, and with the political argument for the HDV lost, this is inexplicable and reckless behaviour,” the letter - obtained by HuffPost - states.

The letter points out that of the 28 sitting councillors who support the HDV, only six have been selected to stand in this May’s local elections.

Of all the council candidates selected, just 12 support it and 45 oppose it.

One Cabinet member in Haringey reacted with anger to the move.

I serve the people of my borough first not my party - regardless of what the politburo say.

We write as sitting councillors in Haringey to bring to your attention a difficult matter and to ask for your intervention.

You may be aware that Haringey’s Labour Group has been riven by a policy in which a substantial portion of Haringey owned public land and property, including the entire commercial portfolio, will be transferred to a joint venture limited liability private company, currently called the Haringey Development Vehicle (HDV), a 50/50 partnership between Haringey Council and Lendlease. The HDV has been publicly opposed by most branches and both local constituency parties. The local branches of Unite, Unison, the GMB and both MPs have called on numerous occasions for the HDV to be abandoned. The HDV has been subject to a Judicial Review and the judgement is expected shortly.

Of the 28 sitting councillors who support the HDV, only 6 have been selected to stand as candidates in the May 2018 Local Elections. The overwhelming majority of new candidates stood on a platform opposing the HDV. Of all selected Labour candidates including sitting councillors, 12 support the HDV and 45 oppose it.

The Opposition Liberal Democrats, driven by political opportunism at a time of crisis within the Labour Group, have called for an Emergency Full Council on the HDV, in the full knowledge that sitting councillors are prevented from breaking the whip due to the threat of disciplinary action that could prevent them contesting their seats this May. Therefore, the policy will be driven through by 22 councillors who have only a few months left to serve.

The Housing & Regeneration Scrutiny Panel concluded that the HDV is a financially and legally risky project that will not deliver the social and affordable homes Haringey desperately needs; and yet, to our immense concern, the Council Leader is intent on signing the contract to bring the HDV into existence at the first available opportunity, during this short period before purdah.

The argument the Leader makes is that signing a legally binding contract does not tie the hands of a future administration because the land will be phased in. However, if the agreement is signed a significant proportion of the commercial portfolio, the Haringey Civic Centre, a mosque, a library, a community centre and a care home (closed) in Muswell Hill will automatically be transferred into the HDV on day one.

Ending the contract, and the cost thereof, will be dependent on negotiations with Lendlease. Even at the earliest possible stage, getting out of the contract once signed could cost our borough millions of pounds we can ill afford. Our concern is that the contract is drawn in such a way that if we do not call a halt to the HDV as soon as possible after the election in May, the escalating cost of extricating the borough will become prohibitively unaffordable.

Following the Carillion crisis, and with the political argument for the HDV lost, this is inexplicable and reckless behaviour. We strongly believe that as councillors we must act in the fiduciary interests of the Council which was of paramount consideration when the Housing & Regeneration Scrutiny Panel made its recommendations.

We ask that the NEC intervene as a matter of urgency and take action in accordance with Chapter 13 Clause XI (5) of the Rule Book ‘to ensure effective political management and leadership’.

What is happening in Haringey is bad for the borough and bad for the Labour Party. Public Private Partnerships are currently receiving justified criticism from the leadership of the Party and even the Tory government is looking to review such contracts. The public recognise the risks and as such continuing on the same course without reconsideration is highly irresponsible.